DoorDash Announces Proposed Private Offering of $2.0 Billion of Convertible Senior Notes
- Opportunistic capital raise with proceeds used to enhance strategic flexibility
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A portion of the proceeds to be used to purchase a hedge overlay intended to offset any share dilution until at least a targeted
125% premium to the current stock price
The notes will be senior, unsecured obligations of DoorDash, will bear interest payable semi-annually in arrears and will mature on May 15, 2030, unless earlier repurchased, redeemed or converted in accordance with their terms. Prior to the close of business on the business day immediately before November 15, 2029, the notes will be convertible only upon satisfaction of certain conditions and during certain periods. From and after November 15, 2029, the notes will be convertible at any time at the election of the holders of the notes until the close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, the notes may be settled by paying or delivering, as applicable, cash and, if applicable and at our election, shares of DoorDash’s Class A common stock, based on the applicable conversion rate(s). Holders of the notes will have the right to require DoorDash to repurchase their notes for cash at
DoorDash may not redeem the notes prior to May 20, 2028. On or after May 20, 2028 and on or before the 20th scheduled trading day immediately before the maturity date, DoorDash may, at its option, redeem the notes for cash in whole or in part (subject to a limited exception) at any time, and from time to time, but only if (i) the notes are “freely tradable” (as defined in the indenture governing the notes) as of the date DoorDash sends the related redemption notice and all accrued and unpaid additional interest, if any, has been paid in full as of the first payment date occurring on or before the date DoorDash sends such redemption notice and (ii) the last reported sale price of DoorDash’s Class A common stock exceeds
In connection with the pricing of the notes, DoorDash expects to enter into one or more privately negotiated convertible note hedge transactions and warrant transactions with one or more of the initial purchasers of the notes and/or their respective affiliates and/or other financial institutions (in such capacity, the “option counterparties”). The convertible note hedge transactions will cover, subject to anti-dilution adjustments substantially similar to those applicable to the notes, the number of shares of DoorDash’s Class A common stock that will initially underlie the notes. The convertible note hedge transactions are expected generally to reduce the potential dilution to DoorDash’s Class A common stock upon any conversion of the notes and/or offset any potential cash payments DoorDash is required to make in excess of the principal amount of the converted notes, as the case may be. DoorDash also expects to enter into warrant transactions with the option counterparties whereby DoorDash will sell to the option counterparties warrants to purchase, subject to customary anti-dilution adjustments, the number of shares of DoorDash’s Class A common stock covered by the convertible note hedge transactions. The warrant transactions could separately have a dilutive effect with respect to DoorDash’s Class A common stock to the extent that the market price per share of DoorDash’s Class A common stock exceeds the strike price of the warrants, unless DoorDash elects, subject to certain conditions, to settle the warrants in cash.
DoorDash intends to use a portion of the net proceeds from the offering of the notes to fund the cost of entering into the convertible note hedge transactions described herein (after such cost is partially offset by the proceeds to DoorDash from the sale of warrants pursuant to the warrant transactions described herein), and the remainder of the net proceeds for general corporate purposes, which may include potential acquisitions and potential repurchases of shares of our outstanding Class A common stock. If the initial purchasers exercise their option to purchase additional notes, then DoorDash expects to sell additional warrants to the option counterparties and use a portion of the net proceeds from the sale of the additional notes, together with the proceeds from the additional warrants, to enter into additional convertible note hedge transactions with the option counterparties.
DoorDash has been advised that, in connection with establishing their initial hedge of the convertible note hedge and warrant transactions, the option counterparties and/or their respective affiliates expect to enter into various derivative transactions with respect to DoorDash’s Class A common stock and/or purchase shares of DoorDash’s Class A common stock in secondary market transactions concurrently with or shortly after the pricing of the notes, including with certain investors in the notes. This activity could increase (or reduce the size of any decrease in) the market price of DoorDash’s Class A common stock or the notes at that time. In addition, the option counterparties and/or their respective affiliates may modify or unwind their hedge positions by entering into or unwinding various derivatives with respect to DoorDash’s Class A common stock and/or purchasing or selling shares of DoorDash’s Class A common stock or other of DoorDash’s securities in secondary market transactions following the pricing of the notes and from time to time prior to the maturity of the notes (and (i) are likely to do so during any observation period related to a conversion of notes or following redemption of the notes by DoorDash or following any repurchase of the notes by DoorDash in connection with any fundamental change and (ii) are likely to do so following any repurchase of the notes by DoorDash other than in connection with any such redemption or fundamental change if DoorDash elects to unwind a corresponding portion of the convertible note hedge transactions in connection with such repurchase). This activity could also cause or avoid an increase or a decrease in the market price of DoorDash’s Class A common stock or the notes, which could affect the ability of holders of the notes to convert the notes and, to the extent the activity occurs during any observation period related to a conversion of notes, it could affect the number of shares of DoorDash’s Class A common stock, if any, and value of the consideration that holders of notes will receive upon conversion of such notes.
The notes and the shares of DoorDash’s Class A common stock potentially issuable upon conversion of the notes will be offered only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act. The offer and sale of the notes and the shares of DoorDash’s Class A common stock potentially issuable upon conversion of the notes have not been, and will not be, registered under the Securities Act or the securities laws of any other jurisdiction, and such securities may not be offered or sold in
This press release does not and shall not constitute an offer to sell, or the solicitation of an offer to buy, any notes or shares of DoorDash’s common stock, nor shall there be any offer, solicitation or sale of notes or such common stock in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About DoorDash
DoorDash (NASDAQ: DASH) is one of the world’s leading local commerce platforms that helps businesses of all kinds grow and innovate, connects consumers to the best of their neighborhoods, and gives people fast, flexible ways to earn. Since its founding in 2013, DoorDash has expanded to over 30 countries, using technology and logistics to shape the future of commerce. Through its Marketplace and its Commerce Platform, DoorDash is driving economic vitality in the regions it serves worldwide.
Forward-Looking Statements
This press release contains forward-looking statements regarding the offering of the notes and the convertible note hedge and warrant transactions, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements made in this press release that are not statements of historical fact, including statements regarding whether DoorDash will offer and issue the notes and the terms of the notes, the anticipated use of proceeds from the offering, DoorDash’s expectations in respect of granting the initial purchasers an option to purchase additional notes and expectations regarding the effect of the convertible note hedge and warrant transactions and regarding actions of the option counterparties and/or their respective affiliates, are forward-looking statements and should be evaluated as such. You can identify forward-looking statements because they contain words such as “may,” “will,” “expect,” “anticipate,” “could,” “would,” “intend,” “project,” “believe” or “potential,” or the negative of these words, or other similar terms or expressions that concern our expectations, strategies, plans or intentions. Forward-looking statements are based on DoorDash management’s beliefs, as well as assumptions made by, and information currently available to, them. Because such statements are based on expectations as to future results and are not statements of fact, actual results may differ materially from those projected. Factors that may cause actual results to differ materially from current expectations include, but are not limited to, risks related to the offering of the notes, the intended use of proceeds and the consummation of the convertible note hedge and warrant transactions, including that such transactions may not occur, and the other factors more fully described in DoorDash’s Annual Report on Form 10-K for the year ended December 31, 2024, Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2025 and DoorDash’s other filings with the
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Source: DoorDash
